Changing age structure and input substitutability in the Thai agricultural sector

This paper estimated the degree of elasticity substitution of inputs, particularly young labor, older labor, and physical capital. The elasticity of input substitution was estimated using a nested constant elasticity of substitution (CES) production function and nonlinear regression analysis. Research data were obtained from the annual secondary data of government sources from 1990 to 2013. The findings indicated that the input substitutability of young and older labor was low. However, capital and labor could substitute for each other.
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Changing age structure and input substitutability in the Thai agricultural sector Kasetsart Journal of Social Sciences 38 (2017) 259e263 Contents lists available at ScienceDirect Kasetsart Journal of Social Sciences journal homepage: http://www.elsevier.com/locate/kjssChanging age structure and input substitutability in the Thaiagricultural sectorPakapon Saiyut a, b, *, Isriya Bunyasiri b, c, Prapinwadee Sirisupluxana c,Itthipong Mahathanaseth ca Doctoral Program in Agricultural and Resource Economics, Department of Agricultural and Resource Economics, Faculty of Economics,Kasetsart University, Bangkok 10900, Thailandb Center for Advanced Studies for Agriculture and Food, Kasetsart University Institute for Advanced Studies, Kasetsart University, Bangkok10900, Thailandc Department of Agricultural and Resource Economics, Faculty of Economics, Kasetsart University, Bangkok 10900, Thailanda r t i c l e i n f o a b s t r a c tArticle history: The rapidly aging society and agricultural abandonment by young people in Thailand haveReceived 16 October 2015 changed the age structure of Thai agricultural labor, and influenced the potential forReceived in revised form 15 July 2016 agricultural production. Thus, it is important to study the feasibility of other inputs as aAccepted 22 July 2016 substitute for labor. This paper estimated the degree of elasticity substitution of inputs,Available online 26 August 2017 particularly young labor, older labor, and physical capital. The elasticity of input substi- tution was estimated using a nested constant elasticity of substitution (CES) productionKeywords: function and nonlinear regression analysis. Research data were obtained from the annualage structure, secondary data of government sources from 1990 to 2013. The findings indicated that theelasticity of substitution, input substitutability of young and older labor was low. However, capital and labor couldproduction function, substitute for each other. Moreover, capital better substituted for young labor than olderThai agriculture labor. The results suggested that both the public and private sectors should encourage young people to engage in the agricultural sector, and support investment in farm ma- chinery as a labor substitute. © 2017 Kasetsart University. Publishing services by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/ 4.0/).Introduction impact on agricultural production. However, the impact will depend on the degree of substitution between young Agriculture plays a vital role in the Thai economy as the and older labor, or on that between agricultural, physicalcountry is a major exporter of agricultural and food capital and older labor. The impact will be less if youngproducts which generate income for farming households labor or physical capital can be easily substituted for olderand the labor force. However, the Thai agricultural sector labor.is experiencing a change in its workforce age structure. The different abilities or production skills between theWorkers aged over 60 years increased from 4.79 percent young and older labor help to explain the degree of sub-in 1989 to 13.50 percent of the total agricultural labor stitution. Stloukal (2004) examined previous studiesforce in 2013 (Table 1). The massive movement of young regarding the relationship between aging and agriculturallabor out of the agricultural sector has had a negative abilities in developing countries. He found that most of the older people had physical deficiencies and poor health. However, they continued working until they were very old, * Corresponding author. E-mail address: pakapon@kku.ac.th (P. Saiyut). which might be a considerable obstacle to the expansion of Peer review under responsibility of Kasetsart University. agricultural yield or retaining existing production levels.http://dx.doi.org/10.1016/j.kjss.2016.07.0042452-3151/© 2017 Kasetsart University. Publishing services by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). ...